UPDATE 2-Icahn sues Forest,cites concern on succession plan

June 29, 2012|Reuters

June 29 (Reuters) - Activist investor Carl Icahn, who isseeking representation on the board of Forest Laboratories Inc, said he is suing the U.S. drugmaker to obtain moreinformation about its succession planning.

In a letter to the company's board, Icahn expressed concernthat the Forest's longtime chief, Howard Solomon, might handover the reins to his son, David Solomon, who is senior vicepresident for corporate development and strategic planning.

"Howard Solomon and this board, who collectively own lessthan 2 percent of this great company, must be made to realizethat Forest Labs is not a dynasty to be despotically handed downfrom father to son," Icahn said in the letter, filed with theU.S. Securities and Exchange Commission on Friday.

In a statement, Forest dismissed Icahn's criticism and saidit was "engaged in ongoing succession planning." The company'sindependent directors have retained an executive search firm"to, among other things, provide internal candidate evaluationand external candidate benchmarking services," the company said.

Regarding the 84-year-old Howard Solomon, who has led thecompany for about 35 years, Forest said: "It would be bothinappropriate and unusual to announce his successor at thistime."

After failing to win any representation in a proxy battlelast year, Icahn is again seeking to place four members on theForest board. The annual meeting is set for Aug. 15. Icahn isForest's second-largest shareholder.

According to the lawsuit, filed in Delaware's Court ofChancery, Icahn is seeking information relating to "a peculiarstock repurchase program" in 2011 that might have been arrangedto "ward off a proxy contest by the Icahn Parties."

The complaint also demanded records regarding a recentForest announcement slashing its earnings guidance.

Icahn brought a similar lawsuit seeking internal Forestdocuments a year ago. The parties reached a confidentialsettlement.

Forest shares were up 2.2 percent at $34.87 on Fridayafternoon on the New York Stock Exchange.